5 ETFs to watch this week

Funds tracking agriculture, retail, real estate and emerging markets look to continue rallying.

By TheStreet Staff Feb 14, 2011 11:41AM

Image: Combines in field (© Mark Karrass/Corbis/Corbis)By Don Dion, TheStreet


Here are five exchange-traded funds to keep an eye on this week.


1. PowerShares DB Agriculture Fund (DBA)


The agriculture industry remains in vogue as rising demand and supply concerns fuel the industry, pushing the price of corn, wheat, sugar and other crops higher.


Last week, corn was in the spotlight after a report from the United States Department of Agriculture indicated that stockpiles are expected to fall, further constricting supply. This news proved beneficial for the corn-linked Teucrium Corn ETF (CORN), resulting in new all-time highs for the fund.


Despite its strong rally, CORN's lack of diversification makes it a risky fund for conservative investors. Those looking for a more solid long-term bet will find that the PowerShares DB Agriculture Fund is a better option. This fund allows investors to gain instant access to futures contracts linked to 11 different commodities.


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2. SPDR S&P Retail ETF (XRT)


Although the political upheaval in Egypt and the relentless commodity rally have stolen the attention of many investors and market commentators, earnings season is still in full swing, with companies in a variety of sectors stepping up to the plate this week.

The teen and luxury components of the retail industry will fall into focus over the next few days as Abercrombie & Fitch (ANF) and Nordstrom (JWN) announce quarterly earnings.


The economic calendar will also influence the performance of XRT when retail sales figures come out on Tuesday.


XRT is one fund investors can use to track the consumer recovery. For additional options, investors can check out my piece from last week highlighting ETFs for a consumer rebound.


3. iShares MSCI Home Construction Index Fund (ITB)


Investors will get a feel for the state of the residential real-estate market this week when, on Wednesday, the monthly housing starts report is released


Supply issues continue to plague the residential real estate industry, making it one of the riskier corners of the market to approach. While a promising starts number will likely provide ITB and SPDR S&P Homebuilders ETF (XHB) with a nice short-term jump, the headwinds threatening this sector remain great over the long haul.


Investors seeking a safer long-term bet on real estate should turn to REIT-related funds such asiShares Cohen & Steers Realty Majors Index Fund (ICF). On top of accessing a more solid niche of the market, the strong distributions associated with REITs provide additional comfort.


4. Vanguard Emerging Market ETF (VWO)


The ongoing price war in the ETF industry resulted in a major victory at the start of this year when Vanguard's VWO managed to overtake the elder, more expensiveiShares MSCI Emerging Market Index Fund (EEM) to become the industry's largest emerging-market product.


Last week, Vanguard took an additional step to secure its seat at the top. Once again, the company slashed the expense ratio on the popular fund, dropping it to 22 basis points.

Emerging markets have struggled recently as inflation concerns have sent investors fleeing from these volatile corners of the globe. It will interesting to see if the newly reduced costs associated with VWO will help this fund buck this trend.


5. Market Vectors Egypt ETF (EGPT)


The EGPT will certainly be an interesting fund to watch over the next few days. On Friday, President Mubarak stepped down, handing over his power to the military.


On Jan. 31, EGPT's sponsor, Van Eck, halted EGPT share creation, essentially turning the fund into a closed-end product that has broken away from its underlying index, resulting in the creation of a substantial premium.


According to the company's press release, EGPT is expected to resume normal operations after Egypt's stock exchange reopens. When that occurs, EGPT's premium will be wiped out as the fund falls back in line with its underlying index.

It was earlier announced that the Egyptian stock market would resume normal operations by Sunday. However, the reopening has been delayed until at least Feb. 20.


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